Uganda says will Conclude Oil Refinery Negotiations With Lead Investor Russian RT Global

Uganda’s Finance Minister Matia Kasaija told the nation during budget reading that negotiations for the proposed oil refinery are expected to be complete by September 2016.

It will at that stage spur the kickoff of Final Investment Decision (FID) by the lead investor.

The agreements Uganda oil understands will include; The Project Framework Agreement between government of Uganda and the lead investor; RT Global Resources, The Implementation Agreement between government and the Refinery company and The Shareholder Agreement to signed between the National Oil Company (NOC), The Refinery holding company and the lead Investor Special Purpose Vehicle.

Kasaija said 188 billion shillings ($56 million) in the 2016/17 financial year to be used for the development of its oil and gas field.

The proposed refinery output capacity at the initial development phase is expected at 60,000 bpd and 120,000 bpd midterm and 180,000bpd long term, based on more discoveries in the country.

The consortium of companies that won the contract to build includes; Russian firm RT Global, VT Bank also from Russia and a South Korean conglomerate GS.

The government has acquired 29 square kilometers to erect the multipurpose facility which will be funded as a Public Private Partnership (PPP) of 60 percent Private and 40 percent Public (60:40 Equity). The project is valued at $2.5 billion.

The government says is concluding on the acquisition of 29 square Kilometers of Land on which the project will be situated. The relocation and compensation exercise of Project Affected Persons (PAP) is expected to concluded in February 2016.

According to civil society organisation African Institute for Energy Governance (Afiego), government has not fully implement the resettlement exercise of Projected Affected Persons (PAPS) on the Land.

Below are inforgraphics representing the current resettlement situation.

President Yoweri Museveni said during state address that the country would start producing oil by 2020.

“By 2020, we shall start pumping out our oil. Even at the low price of $50 per barrel, if we shall be pumping 30,000 barrels per day for the refinery and 170,000 barrels per day for the pipeline, the total will be 200,000 barrels per day that will give us an additional income of $3 billion per year. The government portion of that money will be $2.1 billion, which is 70%.”

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